L3Harris Technologies, Inc. (LHX): Business Model Canvas [Dec-2025 Updated]

You're digging into how a major defense contractor actually locks in its revenue, and honestly, their Business Model Canvas tells a clear story of strategic focus. This isn't about quick sales; it's about being the indispensable, agile technology provider across all five domains-space, air, sea, land, and cyber-for the U.S. government. They are banking on a projected \$21.75 billion in 2025 revenue, supported by a massive backlog, including that \$6.7 billion award in Q3 2025, all driven by proprietary IP and deep customer relationships. Here's the nine-block breakdown showing exactly how they sustain this high-margin defense ecosystem.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Key Partnerships

You're looking at the ecosystem L3Harris Technologies, Inc. relies on to deliver its complex defense and commercial technology solutions. This isn't just about selling hardware; it's about deep integration with government bodies and strategic tech alliances. Honestly, their success hinges on these relationships staying strong.

U.S. Department of Defense (DoD) and Federal Agencies

The U.S. Department of Defense and its agencies are the bedrock of L3Harris Technologies, Inc.'s revenue. These partnerships are often structured as large, multi-year Indefinite Delivery, Indefinite Quantity (IDIQ) contracts, providing a stable revenue base. For instance, the Naval Information Warfare Systems Command awarded an IDIQ contract in February 2022, with a total value of $3.69 Billion, for portable radios and ancillary parts, expected to complete by February 2027.

Recent 2025 awards highlight continued reliance on L3Harris Technologies, Inc. for critical space and ground systems. The U.S. Army awarded a $263 million contract on January 21, 2025, for continued production of the Enhanced Night Vision Goggle - Binocular (ENVG-B), with over 28,000 units delivered to date. Furthermore, the U.S. Space Force awarded a follow-on, sole-source contract worth $90 million on March 19, 2025, to advance the Advanced Tracking and Launch Analysis System (ATLAS) for Space Domain Awareness modernization.

Here are some specific contract figures showing the depth of these federal relationships:

• $6 Billion IDIQ contract with the U.S. Army for new SINCGARS radios.
• Potential seven-year, $479 million contract with U.S. Special Operations Command (USSOCOM) for tactical communications radios.
• $89,996,615 cost-plus-fixed fee order for ATLAS software development (awarded January 2025).
• A contract modification in January 2025 increased the total cumulative face value of a sustainment contract (covering Space Surveillance Telescope, Space Fence, etc.) to $1,114,989,837.

Major Aerospace Primes

L3Harris Technologies, Inc. functions as a key supplier and collaborator for the largest defense primes, integrating its electronics and systems into their major platforms. This positioning makes L3Harris Technologies, Inc. somewhat agnostic to which prime wins the largest platform bids, as long as their systems are specified.

A clear example of this collaboration occurred with the Space Development Agency (SDA). In July 2022, L3Harris Technologies, Inc. and Northrop Grumman were awarded a contract for the Tranche 1 Tracking Layer program. L3Harris Technologies, Inc.'s portion of that award was $700 million to build prototype monitoring satellites.

It's a classic prime-sub relationship, but with L3Harris Technologies, Inc. often providing the specialized 'brains' for the larger platforms built by companies like Lockheed Martin or Boeing. That's the modern defense shift; it's less about the metal bending and more about the electronics.

AI/Software Partners: Palantir Technologies

The strategic partnership with Palantir Technologies Inc., initiated in late October 2024, is central to L3Harris Technologies, Inc.'s digital transformation and edge computing strategy. This alliance focuses on blending L3Harris Technologies, Inc.'s sensors and software-defined systems with Palantir's Artificial Intelligence Platform (AIP).

This partnership is actively working on U.S. Army programs, including TITAN, where Palantir is the prime and L3Harris Technologies, Inc. is a subcontractor for resilient communication solutions. A tangible result of this collaboration was the integration of L3Harris Technologies, Inc.'s WESCAM MX-20 EO/IR system with Palantir's Sensor Inference Platform (SIP), which provided edge AI for improved target detection during a live fly test.

The table below summarizes the focus areas of this key technology partnership:

Venture Capital Firms: Shield Capital

L3Harris Technologies, Inc. uses venture capital firms like Shield Capital to scout and gain early access to disruptive technologies, aligning with its Trusted Disruptor strategy. The relationship with Shield Capital, which started with a strategic partnership in March 2022, goes beyond simple scouting; it involves direct investment.

L3Harris Technologies, Inc. participated as a strategic investor in Shield AI Inc.'s $240 million F-1 funding round, announced in March 2025. This investment was made at a post-money valuation of $5.3 billion for Shield AI. This move secures L3Harris Technologies, Inc.'s access to cutting-edge autonomy software, such as Shield AI's Hivemind Enterprise platform, which is intended to accelerate autonomous capabilities across L3Harris Technologies, Inc.'s portfolio.

International Defense Entities: UAE's EDGE Group

Expanding global reach involves formal agreements with key international defense players. L3Harris Technologies, Inc. has provided capabilities to customers in the UAE for more than 35 years and maintains a corporate office in Abu Dhabi.

On November 18, 2025, L3Harris Technologies, Inc. and EDGE Group signed a Memorandum of Understanding (MOU) to further their collaboration in the UAE. This preliminary agreement sets a framework for joint research and development in artificial intelligence and autonomy, aiming to accelerate the development and delivery of advanced solutions for the UAE's defense needs.

Finance: draft 13-week cash view by Friday.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Key Activities

You're looking at the engine room of L3Harris Technologies, Inc., the core things they absolutely must do well to keep that massive defense pipeline flowing. It's all about execution on complex, high-stakes programs, and frankly, managing the sheer volume of work they've booked.

Research and development (R&D) in space, missiles, and electronic warfare

L3Harris Technologies, Inc. channels significant resources into innovation, which is non-negotiable in this sector. For the fiscal year 2025, the company expects its Research and Development expenditures to be approximately 2% of revenue. This investment fuels the development pipeline across critical areas like space systems, munitions, and electronic warfare, which are clearly driving current demand signals. The company is actively investing in new space and solid rocket motor manufacturing capacity to meet national defense demand, particularly supporting the Aerojet Rocketdyne segment's backlog.

Design, integration, and production of mission-critical systems

The day-to-day activity centers on taking those complex requirements and turning them into hardware and software that works reliably in the field. The success of this activity is visible in the top-line growth; for instance, in the third quarter of 2025, L3Harris Technologies, Inc. reported organic revenue growth of 10% across every segment. Furthermore, one segment saw its organic revenue jump by 15%, directly attributed to increased production volumes across key missile, munitions, and space programs, plus new program ramps. Securing major wins, like the $2.2 billion contract from South Korea for next-generation airborne early warning business jets, shows their capability as a mission system integrator.

Executing the LHX NeXt cost savings and operational efficiency program

This is where they focus on making the complex business run leaner. The LHX NeXt initiative is a major driver of margin improvement. L3Harris Technologies, Inc. exceeded its cost-savings target for 2024, achieving $800 million, and subsequently raised the overall cost-savings goal to $1.2 billion by the end of 2025, a year ahead of schedule. This program was initially set to deliver $1 billion in gross cost savings over three years. The results are tangible: the Adjusted Segment Operating Margin for Q3 2025 reached 15.9%, with cost savings cited as a key driver.

Sustaining and modernizing existing defense platforms

A significant portion of the work involves keeping legacy and current platforms operational and upgraded. This activity supports the steady revenue base. For example, the Integrated Mission Systems (IMS) segment reported revenue of $1.70 billion in Q3 2025, while Communication Systems (CS) reported $1.46 billion. The company's strategy involves divesting non-core assets, like the Commercial Aviation Solutions (CAS) business, to sharpen focus on these core defense modernization areas. This focus helps maintain strong performance, as seen by the 10% organic revenue growth in Q3 2025.

Managing a record backlog of orders, like the Q3 2025 $6.7 billion

Managing the order book is a primary activity, signaling future revenue visibility. L3Harris Technologies, Inc. reported total orders of $6.7 billion in the third quarter of 2025, resulting in a book-to-bill ratio of 1.2x. This strong intake contributed to the company raising its full-year 2025 revenue guidance to $22 billion. The overall backlog is substantial, with the Aerojet Rocketdyne segment alone holding a record financial backlog of $8.3 billion. The company achieved a record total backlog of $34 billion at the end of 2024. Here's a quick snapshot of the Q3 2025 performance supporting this activity:

The company is definitely executing against a high-volume environment. Finance: draft the Q4 2025 cash flow projection by Thursday.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Key Resources

You're looking at the core assets L3Harris Technologies, Inc. relies on to win and execute its defense and civil contracts. These aren't just line items on a balance sheet; they are the tangible and intangible foundations of their competitive edge as the Trusted Disruptor.

Highly-cleared technical and engineering workforce

The talent pool is definitely a primary resource, especially given the nature of the work. L3Harris Technologies reported having approximately 47,000 employees as of January 3, 2025. Of that total, roughly 18,000 were engineers and scientists. To be fair, retaining this specialized group is a constant challenge in this sector.

Security clearances are non-negotiable for many programs. As of January 3, 2025, about 2,600 of their U.S. employees held security clearances. The need for this specialized human capital is clear from their open requisitions; for example, in late 2024, they had 400 open positions on ClearanceJobs.com, including 287 Secret and 64 Top Secret/SCI roles.

• Total Employees (Jan 3, 2025): 47,000
• Engineers and Scientists: Approximately 18,000
• U.S. Employee Security Clearance Holders (Jan 2025): Approximately 2,600

Specialized manufacturing facilities (e.g., Aerojet Rocketdyne propulsion)

The physical footprint, especially after the Aerojet Rocketdyne acquisition, is a massive resource. L3Harris Technologies closed that deal for $4.7 billion. This segment is expected to contribute approximately $2.5 billion in revenue for fiscal 2025. They are actively building capacity to meet surge demand.

The company is currently building and upgrading more than a dozen manufacturing facilities across its sites. This expansion is partly supported by a $215.6M cooperative agreement with the Department of Defense (DoD) focused on solid rocket motor production for systems like Javelin and GMLRS. They even provided over $25 million in capital directly to their sub-tier suppliers to help them modernize tooling and expand their own facilities.

Proprietary intellectual property (IP) and waveforms

L3Harris Technologies' IP is embedded in its long-term contract incumbency. For instance, a May 2025 contract win for a next-generation security processor builds upon the company's 30-year legacy of developing secure communication hardware infrastructure. This type of proprietary technology is essential for securing weapons systems against cyber threats.

Also, their success in areas like resilient communications relies on proprietary waveforms. They won the NextGen Jammer Low Band contract, which is a clear demonstration of delivering game-changing technology for critical Navy missions.

Extensive portfolio of government contracts and program incumbency

The backlog is the clearest indicator of their incumbency strength. At the end of 2024, L3Harris Technologies reported a record backlog of $34 billion. This was built on orders reaching $24 billion during 2024. More recently, for the third quarter of 2025, orders totaled $6.7 billion, resulting in a book-to-bill ratio of 1.2x.

This translates directly into revenue visibility. Management projected 2025 revenue in the range of $21.8 billion to $22.2 billion, reflecting 4% organic growth at the midpoint. The Q3 2025 revenue itself was $5.7 billion, up 10% organically year-over-year.

• Record Backlog (End of Q2 2025): $35.4 billion
• 2025 Revenue Guidance (Updated Q3): Approximately $21.75 billion
• 2024 Orders: Reached $24 billion
• Q3 2025 Book-to-Bill Ratio: 1.2x

Significant capital for R&D and capacity expansion in key locations

You see the commitment to future capabilities in their R&D spend. In fiscal 2024, L3Harris Technologies invested $515 million in company-funded Research and Development. Honestly, that represented 2% of total revenue for that year. This investment is targeted through their LHX NeXt initiative to enhance agility and performance.

The company is clearly positioning for future growth, targeting 2026 revenue of $23 billion. This requires sustained capital deployment, even as they manage debt, having achieved their 3.0x leverage target by the end of 2024.

Finance: draft 13-week cash view by Friday.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Value Propositions

L3Harris Technologies, Inc. delivers end-to-end technology solutions connecting the space, air, land, sea and cyber domains in the interest of national security. As of late 2025, the company supports government customers in more than 100 countries, with approximately 47,000 employees as of January 3, 2025.

The status as the Trusted Disruptor is a core value proposition, emphasizing speed and agility to government customers. CEO Christopher Kubasik noted the industry is entering an era defined by urgency, speed, and mission focus. This focus is translating into tangible business wins, such as the $2.2 billion award for a Korea Airborne Early Warning & Control program received just after the third quarter of 2025 ended.

The portfolio is aligned with key growth areas, providing mission-critical systems. For instance, the Communication Systems (CS) segment revenue saw a 6% increase in the third quarter of 2025, driven by higher international volume and the program ramp of the Next Generation Jammer, described as the flagship Electronic Warfare tactical jamming pod. The company is driving sustained performance, marking its eighth consecutive quarter of year-over-year adjusted segment operating margin expansion, which stood at 15.9% in the third quarter of 2025.

High-performance propulsion and power systems are a key offering, particularly through the Aerojet Rocketdyne (AR) segment. This segment's revenue increased by 13% in the third quarter of 2025, driven by increased production volume on key missile and munitions programs. The company is also making investments in physical infrastructure, with L3Harris Technologies breaking ground on Arkansas Advanced Propulsion Facilities in November 2025.

The value proposition includes delivering rapidly deployable solutions at an accelerated pace to meet evolving mission needs. This capability is supported by strong financial execution, with updated full-year 2025 revenue guidance raised to approximately $22 billion, up from a prior guidance of around $21.75 billion. The company's third quarter 2025 orders were $6.7 billion, resulting in a book-to-bill ratio of 1.2x.

The integration across the five domains is reflected in the segment performance for the third quarter of 2025:

The overall financial outlook supports these value drivers, with the midpoint of the updated full-year 2025 Non-GAAP EPS guidance set between $10.50 and $10.70.

The comprehensive technology offering includes:

• Delivering solutions for the space domain, including sensors and payloads.
• Providing capabilities for the air domain, such as airborne ISR and electronic attack systems.
• Supporting the sea domain with systems for shipbuilding and sensors.
• Offering command and controls for land platforms like the Joint Strike Fighter.
• Securing the cyber domain with resilient communications and data-link equipment.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Customer Relationships

Dedicated, long-term contractual relationships with government procurement offices form the bedrock of L3Harris Technologies, Inc.'s business. The company's record backlog stood at $34 billion at the end of 2024, providing significant revenue visibility. In the third quarter of 2025 alone, L3Harris Technologies, Inc. secured new orders totaling $6.7 billion, resulting in a book-to-bill ratio of 1.2x for that period. This relationship is further evidenced by capturing major international awards, such as the $2.2 billion Korea Airborne Early Warning & Control award received just after the third quarter of 2025.

High-touch, consultative sales are essential for complex, classified programs, which remain a core focus. The company transitioned to being a space prime contractor with over 40 satellites in backlog, largely focused on missile warning/missile tracking and classified missions for Defense and Intel community customers. The nature of this work requires deep integration, as seen in a sole-source acquisition for the Advanced Tracking and Launch Analysis System (ATLAS), where Fiscal 2025 research, development, test, and evaluation funds of $5,436,602 were obligated at the time of award.

Account management heavily emphasizes program sustainment and modernization, ensuring long-term revenue streams from existing platforms. A contract modification for sustainment activities, including the Space Surveillance Telescope Option Year Six, increased the total cumulative face value of that underlying contract to $1,114,989,837 from $1,049,374,027. This specific modification added $65,615,810 to the total. The company's portfolio is aligned with key growth areas like space, missiles, and resilient communications, supporting what the CEO described as a generational investment cycle in defense.

Strategic collaboration on new technology development with key allies is accelerating, driven by growing U.S. and allied defense budgets. The company is delivering resilient communication products, with growth in software-defined tactical radios being especially strong across international markets, particularly from NATO countries. The third quarter of 2025 revenue growth of 10% organically reflected increased international deliveries.

Direct engagement with NASA for space exploration programs is secured through multi-year, high-value contracts. L3Harris Technologies, Inc. booked a $765.5 million cost-plus-award-fee contract to develop a high-resolution infrared imaging system for a collaborative Earth observation initiative of NASA and the National Oceanic and Atmospheric Administration (NOAA). Furthermore, another contract with NASA has a current end date extending to Nov 10, 2029.

Here's a quick look at some key financial metrics and contract activity around late 2025:

The company's customer relationship strategy is supported by operational improvements, with management noting an eighth consecutive quarter of year-over-year adjusted segment operating margin expansion.

• Sustainment contract modification value increase: $65,615,810
• New major international award: $2.2 billion
• NASA/NOAA imaging contract value: $765.5 million
• Fiscal 2025 RDT&E funds obligated on ATLAS contract: $5,436,602

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Channels

Direct sales teams engage the U.S. Department of Defense (DoD) and intelligence agencies through large Indefinite Delivery, Indefinite Quantity (IDIQ) contracts and specific purchase orders. For instance, L3Harris Technologies, Inc. secured an IDIQ award from the U.S. Navy worth up to $999 million to provide Multifunctional Information Distribution System Joint Tactical Radio System Terminals (MIDS JTRS), continuing support for U.S. and coalition forces for 24 previous years. Also, the U.S. Army awarded a $487.3 million contract for Enterprise Terminals, Depots Modernization (MET DESS) with work extending until June 21, 2030. The company is executing under a potential 10-year, $12.7 billion contract awarded to Harris in 2016, which included a $300 million purchase order for handheld, manpack, and small form fit (HMS) radios in January 2025.

Direct contracts with international allied governments are a significant channel, often stemming from U.S. Foreign Military Sales (FMS) programs. L3Harris Technologies, Inc.'s first quarter 2025 revenue showed a 4% increase, driven primarily by higher international volume on resilient communication equipment. This trend continued, with third quarter 2025 revenue increasing 6%, largely due to increased international deliveries for software-defined resilient communications and data-link equipment. The Communication Systems segment's first quarter 2025 operating margin expanded due to a favorable high margin international mix.

Prime contractor and subcontractor relationships form a core part of the delivery mechanism across domains. L3Harris Technologies, Inc.'s reported revenue by customer relationship for the fiscal year ended January 3, 2025, showed $4,307 million categorized as Prime contractor revenue across its segments. The company is a prime contractor for the Space Development Agency's (SDA) Tranche 2 Tracking Layer initiative, receiving a contract valued up to $919 million to build 18 infrared space satellites. Furthermore, L3Harris Technologies, Inc. is one of two providers for the MIDS JTRS solution, indicating a key subcontractor/partner role within that specific platform ecosystem.

A global network of field service representatives supports sustainment and operational readiness for deployed systems. While a specific number of representatives isn't public, the scope is broad, supporting U.S. and coalition forces across 57 allied nations for Link 16 solutions. The U.S. Army contract for modernization services, valued at $487.3 million, explicitly includes modernization and engineering services support through 2030, which necessitates field presence. The company's record orders in 2024 reached $24 billion, which necessitates a robust sustainment channel to support that installed base.

Direct engagement with NASA for space propulsion systems is channeled through specialized segments like Aerojet Rocketdyne. L3Harris Technologies, Inc. has been contracted by NASA to rework the RS-25 engine design and production since 2015, supporting the Artemis missions. In April 2023, the company announced a $27 million contract to support NASA's Space Launch System (SLS) Booster Obsolescence and Life Extension program. The Aerojet Redmond team is currently working on thrusters for missions as far out as Artemis 8, scheduled no earlier than 2033. The In-Space Engine (ISE) family development includes bipropellant rocket engines suitable for in-space transport applications, featuring thrusters in the five pounds to 900 pounds thrust class.

The scale of contract activity through these channels is substantial, underpinning the company's financial structure. You can see the magnitude of recent contract wins below:

The overall demand driving these channels resulted in record orders of $24 billion in 2024, contributing to a backlog of $34 billion at year-end 2024. The company is targeting $23 billion in revenue by 2026. For the third quarter of 2025, orders reached $6.7 billion, yielding a book-to-bill ratio of 1.2x.

Key revenue drivers across these channels in 2025 included:

• Increased international volume on resilient communication equipment.
• Increased production volume across key missile and munitions programs.
• Growth in the Aerojet Rocketdyne (AR) segment, up 9% organically in Q1 2025.
• The Next Generation Jammer program ramp for Electronic Warfare tactical jamming pods.
• New program ramps in Space & Airborne Systems (SAS).

The company's Q1 2025 revenue was $5.1 billion, and the annual revenue for the fiscal year ended January 3, 2025, was $10.51B.

Finance: Review Q4 2025 international revenue contribution against Q3 2025 mix data by end of month.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Customer Segments

You're looking at the core buyers for L3Harris Technologies, Inc. (LHX) as of late 2025. The business model is heavily weighted toward government spending, which is typical for a defense prime and systems integrator of this scale.

U.S. Department of Defense (DoD) and intelligence community

This is the anchor of the L3Harris Technologies, Inc. customer base. In fiscal year 2024, sales to U.S. Government customers, which includes foreign military sales funded through the U.S. Government, accounted for 76% of total revenue. No other single customer represented more than 5% of revenue in that period. The company's segments, like Integrated Mission Systems (IMS) and Space & Airborne Systems (SAS), are deeply embedded in these missions. For instance, Q1 2025 revenue for SAS was $1,611 million, and IMS was $1,592 million.

International allied governments and foreign militaries

International sales are a growing component, often flowing through Foreign Military Sales (FMS) channels or direct government contracts. The company is actively capturing new international opportunities. A concrete example is the $2.2 billion Korea Airborne Early Warning & Control award received just after the third quarter of 2025 ended. The Communication Systems (CS) segment showed international mix benefits contributing to margin expansion in Q1 2025. For the third quarter of 2025, total revenue was $5.7 billion.

NASA and other U.S. federal government agencies

This group includes civil agencies like the National Aeronautics and Space Administration (NASA). The Aerojet Rocketdyne (AR) segment provides propulsion and power systems that directly serve NASA missions. In Q1 2025, the AR segment generated $629 million in revenue. The overall revenue base for L3Harris Technologies, Inc. in Q3 2025 was $5.7 billion.

Major domestic and international aerospace and defense prime contractors

L3Harris Technologies, Inc. acts as a key subsystem provider to larger prime contractors. This relationship is evident across several segments, including AR providing products to prime contractors. The company's total orders reached $24 billion at the end of 2024, showing robust demand from the entire defense ecosystem. For the third quarter of 2025, the book-to-bill ratio was 1.2x on orders of $6.7 billion.

Homeland security and public safety agencies (smaller segment)

The Communication Systems segment supports federal, state, and local agency customers for homeland security and public safety needs. While smaller than the primary DoD focus, this provides a stable, non-DoD revenue stream. The CS segment reported revenue of $1,352 million in the first quarter of 2025.

Here's a look at the scale of the business units serving these customers based on Q1 2025 reported revenue:

The company is guiding for 2025 sales in the range of $21.8 billion to $22.2 billion, with a July 2025 update forecasting about $21.75 billion in annual revenue. Finance: review the Q3 2025 international revenue percentage against the $2.2 billion Korea contract booking.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Cost Structure

You're looking at the cost drivers for L3Harris Technologies, Inc. as of late 2025. For a company deeply embedded in defense and specialized technology, the cost structure is heavily weighted toward upfront investment and specialized labor.

High fixed costs for R&D and specialized manufacturing infrastructure are a given, supporting complex programs across segments like Space and Airborne Systems (SAS) and Integrated Mission Systems (IMS). While specific R&D spend for the full year 2025 isn't explicitly broken out here, the nature of their business, which includes classified development programs, demands continuous, high-level investment in facilities and technology that don't scale down easily with short-term revenue fluctuations.

Significant personnel costs for a highly-skilled, cleared workforce are embedded within the operating expenses. The complexity of their product portfolio-from resilient communications to electronic warfare-requires engineers, technicians, and program managers with specific security clearances, making labor a premium, non-negotiable expense.

The company's ongoing efficiency drive, the LHX NeXt transformation, directly targets these cost bases. The goal was to achieve a total of $1.2 billion in cost savings by the end of 2025, having already banked $800 million in savings during 2024. This initiative is explicitly cited as a driver for margin improvement, even as LHX NeXt implementation costs were noted in Q1 2025 GAAP Operating Margin analysis.

Material and supply chain costs form the largest component of the direct cost of revenue. For the third quarter of 2025, the reported Cost of revenue was $4,165 million. This figure reflects the procurement and assembly of complex hardware and components necessary for their defense contracts, which are subject to supply chain pressures, as noted by industry bracing for impacts from trade tensions.

Finally, Amortization of acquisition-related intangibles remains a material factor, though management noted that lower amortization contributed to higher GAAP Operating Margin in Q3 2025. For the twelve months ending September 30, 2025, L3Harris Technologies Inc reported total Depreciation and Amortization of $3.145B.

Here's a quick look at the scale of costs relative to revenue context for 2025:

The company's focus on operational improvements is clear, as evidenced by the Q3 2025 Adjusted Segment Operating Margin reaching 15.9%.

Key cost-related activities influencing the structure include:

• Lower amortization of acquisition-related intangibles positively impacting GAAP Operating Margin in Q3 2025.
• Costs related to the LHX NeXt initiative including workforce optimization and incremental IT expenses.
• Impacts from the divestiture of the Commercial Aviation Solutions (CAS) business, which reduced the revenue base and associated costs.
• Challenges on classified fixed price development programs impacting margins in the Space Systems segment.

Finance: draft 13-week cash view by Friday.

L3Harris Technologies, Inc. (LHX) - Canvas Business Model: Revenue Streams

You're looking at how L3Harris Technologies, Inc. pulls in its money, which is heavily weighted toward the US government and large, multi-year defense programs. Honestly, the revenue streams are deeply tied to the defense budget cycle and major platform modernization efforts. As of late 2025, the full-year revenue guidance has been increased to approximately $22 billion, reflecting a strong operational year.

The core of the revenue comes from long-term government contracts, which typically fall under Cost-Plus or Fixed-Price arrangements. While the exact split isn't always public, the segment structure gives us a good look at where the money is coming from. For instance, the initial 2025 guidance showed significant expected revenue from the major segments:

This structure shows a near-even split between the larger mission-focused segments, which are the primary holders of those long-term government contracts. The third quarter of 2025 itself brought in $5.7 billion in revenue, with orders hitting $6.7 billion, leading to a book-to-bill ratio of 1.2x. That's a healthy sign for future revenue recognition.

Product sales of hardware form a major component within these segments. Think about the physical equipment L3Harris Technologies, Inc. delivers. This includes things like tactical radios, which were mentioned in the context of margin impact from competitive IDIQ contracts, sensors, and components for munitions and space programs, which saw increased production volumes.

Sustainment, modernization, and technical services revenue is the recurring, sticky part of the business. You see this clearly in the international awards. For example, the Republic of Korea selected L3Harris Technologies, Inc. for an Airborne Early Warning & Control (AEW&C) program valued at more than $2.26 billion. This award explicitly involves the need to develop, test, integrate, and sustain this vital capability for years to come.

International defense sales are a clear growth driver, exemplified by that major Korea award. This deal is for modified Bombardier Global 6500 AEW&C aircraft. The Communication Systems segment, for instance, saw its revenue guidance increased to $5.7 billion, driven by continued strong international demand.

You can expect revenue to flow from several key activities:

• Securing and executing on large, multi-year US Government contracts.
• Delivering new hardware platforms like advanced aircraft systems.
• Providing ongoing maintenance and technical support for fielded systems.
• Capturing international sales, like the recent major award in Korea.

To be fair, while the revenue guidance is up, the company reiterated its full-year 2025 free cash flow guidance at $2.65 billion, acknowledging that Q3 cash generation was softer than expected due to customer payment timing. Finance: draft 13-week cash view by Friday.